TMI Blog2018 (10) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary, 2015 of the CIT(A)-6,Delhi relating to Assessment Year 2004-05. 2. The only effective ground raised by the Revenue reads as under:- 1. Whether on the facts and circumstances of the case in law, the ld.CIT(A) was justified in holding that reassessment cannot be made in the case of a dissolved company even for the year in which the company was existing. 3. The facts of the case in brief are that the assessee is a company and filed its return of income on 31st October, 2004 declaring loss of ₹ 11,08,72,956/-. The Assessing Officer completed assessment u/s 143(3) on 29th September, 2006 determining the loss at ₹ 8,78,79,819/-. Thereafter, notice u/s 148 dated 28th March, 2011 was issued to the assessee. The assessee, in response to the statutory notices, appeared before the Assessing Officer and filed various details as called for. The Assessing Officer completed the assessment determining the loss at ₹ 7,27,32,900/-. 4. Before the CIT(A), apart from challenging the additions on merit, the assessee challenged the validity of the notice issued u/s 148 of the IT Act. It was argued that the assessee company got dissolved pursuant to the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee on March 28, 2011. In reply to the AO the assessee filed letter dated 26.04.2011 stating that assessee company did not exist as it has been dissolved pursuant to order of Hon ble High Court of Delhi and that the notice under section 148 of the Act cannot be issued to the non-existent company. The above fact was also brought to the notice of the AO by submission dated 27.05.2011 and 30.09.2011. The assessee also submitted before the AO copy of the order of High Court dissolving the assessee company. It was also submitted by the assessee that the return filed under section 139(1) of the Act may be considered as the return filed in response to the notice under section 148. In response to the request of the assessee, reasons recorded for initiating reassessment proceedings was also provided to the assessee by the AO. The objections raised by the appellant against the proceedings u/s 147 were duly disposed off by the AO vide its order dated August 19, 2011. 4.2 The assessee company NDC Telecommunication India(P)Ltd. got dissolved pursuant to the Order of Hon ble Delhi High Court passed on August 6, 2009 whereas the notice under section 148 of the Act was issued to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exist w.e.f. 1st July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said dead person. When notice under Section 143(2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing ITA 475/2011 ITA- 476/2011 Page 9 of 13 Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law. 4.7 In Impsat (P) Ltd. vs. Income Tax Officer (2005) 92 TTJ (Del) 552 : (2004) 91 ITD 354 (Del) (ITAT Delhi) Hon ble Delhi Tribunal held as under: It is thus clear that in the present case the assessee-company ceased to exist after being dissolved under s. 560. Once it ceased to exist, there was no quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... survive. Therefore, I do not find the need to adjudicate the other grounds of appeal. 6. Aggrieved with the said order of the CIT(A), the Revenue is in appeal before the Tribunal. 7. The ld. Counsel for the assessee, at the outset, filed a series of decisions and submitted that the re-assessment proceedings initiated against a dissolved company/non-existent company is void ab initio . Therefore, this being a covered matter in view of the various decisions including the decision of the Hon'ble Delhi High Court in the case of Spice Entertainment Ltd. vs. CIT 247 CTR 500 (Del) and CIT vs. Dimension Apparels Pvt. Ltd., 370 ITR 288 (Del), the ground raised by the Revenue should be dismissed. The ld. DR, on the other hand, heavily relied on the order of the Assessing Officer. 8. We have considered the rival submissions made by both the sides and perused the orders of the authorities below. We find the ld.CIT(A) quashed the reassessment proceedings on the ground that the same has been initiated on a non-existing entity and, therefore, the reassessment proceedings are void ab initio . We do not find any infirmity in the order of the CIT(A) on this issue. We find the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order in the name of the non-existent company. Therefore, we find merit in the argument of the ld. counsel for the assessee that since the order has been passed in the name of a non-existent company, therefore, the same has to be quashed and the provisions of section 292B will not come to the rescue of the Department. 11. We find the Hon ble Delhi High Court in the case of Spice Entertainment Ltd. (supra) has observed as under :- 12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292Bof the Act. Section 292B of the Act reads as under:- 292B. No return of income assessment, notice, summons or other proceedings furnished or made or issue or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence is concerned, in terms of Section 140 of the 1961 Act, the same cannot be treated to be even a return filed by the respondent assessee, as the same does not even bear her signatures and had not even been verified by her. In the aforesaid view of the matter, it is not possible for us to accept that the return allegedly filed by the assessee was in substance and effect in conformity with or according to the intent and purpose of this Act. Thus viewed, it is not possible for us to accept the contention advanced by the learned Counsel for the appellant on the basis of Section 292B of the 1961 Act. The return under reference, which had been taken into consideration by the Revenue, was an absolutely invalid return as it had a glaring inherent defect which could not be cured in spite of the deeming effect of Section 292B of the 1961 Act. 15. Likewise, in the case of Sri Nath Suresh Chand Ram Naresh Vs. CIT (2006) 280 ITR 396, the Allahabad High Court held that the issue of notice under Section 148 of the Income Tax Act is a condition precedent to the validity of any assessment order to be passed under section 147 of the Act and when such a notice is not issued and assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal had held that the assessment in substance and effect has been made against amalgamated company in respect of assessment of income of amalgamating company for the period prior to amalgamation and mere omission to mention the name of amalgamated company alongwith the name of amalgamating company in the body of assessment against the item name of the assessee is not fatal to the validity of assessment but is a procedural defect covered by Section 292B of the Act. (Emphasis Supplied) 20. This Court rejected this argument, holding that it [becomes] incumbent upon the Income Tax Authorities to substitute the successor in place of the said 'dead person'. Such a defect cannot be treated as procedural defect... once it is found that assessment is framed in the name of non-existing entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. ( Emphasis Supplied) 21. In Spice Entertainment Ltd. (supra) the reason for the inapplicability of Section 292-B was additionally premised on the decision of the Punjab Haryana High Court in CIT v. Norton Motor, [2005] 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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